principle over and over again, especially internally since it becomes so crucial to focus the millennial and post-millennial employees. Get their attention with creative video and audio messages about the company’s 8020 goals and tasks.
Furthermore, a strong focus boosts your company’s competitiveness. Concentrate the limited resources where your company excels best in a profitable way. Knowing with which customers, with which products/ services, and in which geographical markets you have already succeeded, gives you a clear hint of where to focus. All the passion and time should be focused on your 8020s.
TMH Case Studies
1
- Failure: Lack of focus. There was a client who had 5000 SKUs and we showed him (analysis-wise) that only 600 products made 80% of sales.
We recommended the CEO to discontinue at least 500 very costly and unprofitable products.
We showed data over and over again. But at the end of day, the Owner did not want to “kill” one single product because these products were like his children and he did not want to “kill” them.
- Lesson learned: Products or services are not your children and you should not have an emotional over-attachment to unprofitable products and services.
Actually, thinking about the biggest failures in the business world, all failures have to do with not taking into account disruptions or that the value proposition became obsolete at some time.
When the big data shows you that certain products do not make sense financially please do consider at least to double check if and why you really should keep this product in your portfolio.
2
- Success: We showed a client data that in terms of geography 80% of his business was in the country’s capital since the big companies and budgets were centralized there.
His headquarters were 600 kilometers away from the capital.
So, we showed him with data the potential sales his company might have in the next 3 years penetrating the new target market. He decided to move to the capital and among sound B2B marketing strategies we got two new “big” clients, which by the way had the biggest budgets for his products in the whole market.
His 5-years CAGR (Compound Annual Growth Rate) was +200%.
The EBITDA growth was similar.
- Lesson learned: If you have a physical product or you have to sell your service 1 to 1 to real people you have to be close to your 8020 clients and prospects.
Being in the 8020 zone means your headquarters should be at the target market. 80% of the market value is often driven by only 20% of key players. You and your salesforce have to be close, very close, to your customer.
This was the success story for this particular client and indeed we have created many of these success stories to be near the target market.
Oftentimes, the sales representatives are not close enough with their target market clients and prospects. They are physically and emotionally absent.
*Source: Daimler Strategy statement published on the Daimler webpage.
More information: https://www.daimler.com/company/strategy/ (2020)
PART 2
It is all about
quality
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